Wednesday, May 4, 2011

Hometown Tax System: A Concept Worth Considering


My friend Kim mentioned Japan's hometown tax system in one of her recent blog posts.  Intrigued, I eventually managed to track down more information in the Daily Yomiuri Online.  You can read the April 28 article by clicking on the post title (above) or settle for my virtually verbatim excerpts or just go back to playing with your smarty-pants phone.

The furusato nozei (hometown tax) system encourages people to contribute to their hometown despite living elsewhere.  The four prefectures hardest hit by the earthquake/tsunami/radiation disaster are receiving donations from around the nation at several times the typical rate.

This system allows individuals to donate money to any specific prefectural or municipal government. Many use the system to support their hometown or towns, villages, cities and prefectures for which they feel special affection.  Depending on the individual's income, donations in excess of 2,000 ($25) yen qualify as an income tax deduction. Donations that top 5,000 yen entitle the individual to an equivalent deduction from their resident tax.

This idea appeals to me.  Ever since Bob Dole ran for president and his wife Elizabeth was compelled to disclose the outlandish salary she was hauling down as executive director of the American Red Cross, I have felt uncomfortable about donating to non-profit disaster relief organizations.  During eighteen years working for non-profit organizations, I often felt overworked but only felt underpaid when I learned that my male counterpart with fewer years' experience was raking in more dough.  And that's an entirely different issue.

Another reason this idea appeals to me because I really love my hometown.  I have benefited from the libraries, park and recreation system, post office, Catholic schools and churches, children's theater, dollar movies, radio station, and Coney Island joints of Jackson, Michigan.  It's a medium-sized town surrounded by lakes where some of my most vivid teenage memories were formed.  My parents and grandparents are buried there.  Although I left Jackson forty years ago, most of my siblings raised their families in Jackson and my nieces and nephews are now carrying on that tradition.

If I had the option of donating money to my hometown when income tax time rolled around, I am fairly certain I would check the Yes box.  I like the idea of donating to head off a crisis rather than to compensate for one.

These days we pay taxes to Norfolk and the Commonwealth of Virginia.  Although we haven't lived in Norfolk for five years, I don't begrudge them our money.  Virginia was kind and generous to our family during the eight or nine off-and-on years we lived there so we never seriously considered changing our home-of-record to a state that does not assess taxes.  Avoiding taxes just doesn't sit well with me since (a) most of our family income for the past twenty years has come from tax dollars and (b) paying taxes gives me license to rant about how my money is spent.

Not that I've ever really needed a license to rant...

If you took the time to read the full article, you'll know that at least one Japanese person donated on the basis of sharing a name with the community to which he donated.  Imagine what it would mean to my hometown if just a select few Major League Baseball players surnamed Jackson embraced this concept.

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